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Section 1: 8-K (8-K)

felp-8k_20180630.htm

 

UNITED STATES

SECURITIES AND EXCHANGE

COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 3, 2018

 

 

FORESIGHT ENERGY LP

(Exact Name of Registrant as Specified in Charter)

 

 

Delaware

 

001-36503

 

80-0778894

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

211 North Broadway, Suite 2600

Saint Louis, MO

 

 

 

63102

(Address of Principal Executive Offices)

 

 

 

(Zip Code)

 

(314) 932-6160

(Registrant’s telephone number, including area code)

 (Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 

 


 

 

ITEM 2.02

RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 3, 2018, Foresight Energy LP (the “Partnership”) announced via press release its earnings and operating results for the second quarter 2018.  A copy of the Partnership’s press release is attached hereto as Exhibit 99.1.

The information in this Current Report on Form 8-K (including the exhibits attached hereto) is being furnished under Item 2.02 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS.

 

(d)

Exhibits

 

 

99.1 Press release issued by Foresight Energy LP on August 3, 2018.

 

 

2


 

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

Foresight Energy LP

 

 

By:

 

Foresight Energy GP LLC,

 

 

its general partner

 

 

By:

 

/s/ Robert D. Moore

 

 

Robert D. Moore

 

 

Chairman of the Board, President and

Chief Executive Officer

 

 

Date: August 3, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Section 2: EX-99.1 (EX-99.1)

felp-ex991_6.htm

 

 

Exhibit 99.1

Foresight Energy LP Reports Second Quarter 20181 Results

 

Second Quarter 2018 Highlights:

 

Coal sales of nearly $270.0 million, an increase of 32% compared to the second quarter 2017, on higher sales volumes of 5.9 million tons and higher sales realization per ton sold.

Adjusted EBITDA of $104.1 million.

Cash flows from operations of $30.6 million.

 

Net loss attributable to limited partner units of $29.2 million, or ($0.18) per common unit and ($0.23) per subordinated unit, which includes a $110.7 million non-cash impairment charge and a $69.1 million non-cash contract benefit related to the previously announced closure of Hillsboro operations.  

Declared a $0.0565 per unit distribution from retained excess cash flow generated in 2017, to be paid on August 31, 2018 to unitholders of record as of August 21, 2018.  

 

ST.  LOUIS, Missouri (BUSINESS WIRE) August 3, 2018 — Foresight Energy LP (“Foresight” or the “Partnership”) (NYSE: FELP) today reported financial and operating results for the second quarter ended June 30, 2018.  Foresight generated coal sales revenues of nearly $270.0 million on sales volumes of 5.9 million tons resulting in a net loss attributable to limited partner units of $29.2 million, Adjusted EBITDA of $104.1 million, and cash flows from operations of $30.6 million.  Net loss attributable to limited partner units reflects the receipt of $44.1 million of insurance proceeds related to the combustion event at the Partnership’s Hillsboro operation and includes a $110.7 million non-cash impairment charge and a $69.1 million non-cash contract benefit related to the previously announced closure of the Partnership’s Hillsboro operation.

 

“The second quarter was another successful period for Foresight, as we were able to take advantage of a strong export market to realize significant year-over-year improvements in our sales volumes,” said Mr. Robert D. Moore, Chairman, President and Chief Executive Officer.  “Foresight remains well-positioned to continue capitalizing on the strong export market for our product.  Furthermore, with all of our calendar year 2018 longwall moves completed, we expect to continue to improve on our industry-leading cost structure over the remainder of the year.”

 

Foresight also announced that due to the Partnership’s operating performance during the second quarter, the Board of Directors of its General Partner approved a quarterly cash distribution of $0.0565 per unit from retained excess cash flow.  The distribution is payable on August 31, 2018 for unitholders of record on August 21, 2018.  

 

Second Quarter Consolidated Financial Results

 

Coal sales totaled nearly $270.0 million for the second quarter 2018 compared to $204.5 million for the second quarter 2017, representing an increase of $65.5 million, or 32%.  The increase in coal sales revenues was due to higher coal sales volumes combined with higher coal sales realization per ton sold.  Coal sales volumes and coal sales realization per ton sold were higher due to increased export sales, which experienced more favorable API2 pricing during 2018.  

 

Cost of coal produced was $137.0 million, or $23.70 per ton sold, for the second quarter 2018 compared to $105.8 million, or $21.88 per ton sold, for the second quarter 2017.  The increase was due to an increase in produced tons sold as well as a higher cash cost per ton sold resulting primarily from increased expenses relating to royalties, subsidence, and two longwall moves during the second quarter.  The higher royalty and subsidence expenses are functions of which coal reserve leases and land parcels that we currently mine.  Royalty expense also increased because of higher coal sales realizations per ton.      

 

Transportation costs increased approximately $30.7 million from the second quarter 2017 to the second quarter 2018 due to a higher percentage of sales going to the export market during the current year period and the additional transportation and transloading costs associated therewith.      

 

1

 

 


 

 

 

In April 2018, the permanent closure of the Hillsboro complex was announced.  As a result, Foresight recorded an aggregate impairment charge of $110.7 million in the second quarter of 2018.  Also related to the permanent closure of Hillsboro, Foresight recognized a benefit of $69.1 million associated with the write-off of an unfavorable royalty agreement during the second quarter of 2018.

 

Other operating (income) expense, net increased $29.5 million for the second quarter 2018 compared to the second quarter 2017 primarily due to the receipt of $43.0 million in payments from the insurance companies in the current period compared to $12.8 million in the prior year period.  An additional $1.1 million of insurance proceeds related to the recovery of mitigation costs was recorded to cost of coal produced (excluding depreciation, depletion and amortization).  Foresight continues to pursue additional remedies under its insurance policies; however, there can be no assurances that Foresight will receive any further insurance recoveries related to the Hillsboro combustion event.    

 

During second quarter 2018, Foresight generated operating cash flows of $30.6 million and ended the period with $38.8 million in cash and $124.0 million of available borrowing capacity, net of outstanding borrowings and letters of credit, under its revolving credit facility.  Capital expenditures for the quarter ended June 30, 2018 totaled $15.7 million compared to $21.7 million for the quarter ended June 30, 2017.  

 

Guidance for 2018

 

Based on Foresight’s remaining contracted position, second quarter and year-to-date performance, and its current outlook on pricing and the coal markets in general, the Partnership is affirming and updating the following guidance for 2018:

 

Sales Volumes – Based on current committed position and expectations for the remainder of 2018, Foresight is projecting sales volumes to be between 22.0 and 22.8 million tons, with at least 8.5 million tons expected to be sold into the international market.  

 

Adjusted EBITDA – Based on the projected sales volumes and operating cost structure, Foresight currently expects to generate Adjusted EBITDA in a range of $300 to $330 million.

 

Capital Expenditures – Total 2018 capital expenditures are estimated to be between $70 and $80 million.  

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the federal securities laws.  These statements contain words such aspossible, intend, will, if and expect” and can be impacted by numerous factors, including risks relating to the securities markets, the impact of adverse market conditions affecting business of the Partnership, adverse changes in laws including with respect to tax and regulatory matters and other risks.  There can be no assurance that actual results will not differ from those expected by management of the Partnership.  Known material factors that could cause actual results to differ from those in the forward-looking statements are described in Part I, Item 1A.  Risk Factors of the Partnerships Annual Report on Form 10-K filed on March 72018.  The Partnership undertakes no obligation to update or revise such forward-looking statements to reflect events or circumstances that occur, or which the Partnership becomes aware of, after the date hereof.

 

Non-GAAP Financial Measures

 

Adjusted EBITDA is a non-GAAP supplemental financial measure that management and external users of the Partnership’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies, may use to assess:

 

the Partnerships operating performance as compared to other publicly traded partnerships, without regard to historical cost basis or, in the case of Adjusted EBITDA, financing methods;

the Partnerships ability to incur and service debt and fund capital expenditures; and

the viability of acquisitions and other capital expenditure projects and the returns on investment of various expansion and

growth opportunities.

 

The Partnership defines Adjusted EBITDA as net income (loss) attributable to controlling interests before interest, income taxes, depreciation, depletion, amortization and accretion.  Adjusted EBITDA is also adjusted for equity-based compensation, losses/gains on commodity derivative contracts, settlements of derivative contracts, a change in the fair value of the warrant liability and material nonrecurring or other items, which may not reflect the trend of future results.  As it relates to commodity derivative contracts, the Adjusted EBITDA calculation removes the total impact of derivative gains/losses on net income (loss) during the period and then

 

2

 

 


 

 

adds/deducts to Adjusted EBITDA the amount of aggregate settlements during the period. Adjusted EBITDA also includes any insurance recoveries received, regardless of whether they relate to the recovery of mitigation costs, the receipt of business interruption proceeds, or the recovery of losses on machinery and equipment.  

The Partnership believes the presentation of Adjusted EBITDA provides useful information to investors in assessing the Partnership’s financial condition and results of operations.  Adjusted EBITDA should not be considered an alternative to net (loss) income, operating income, cash flow from operations, or any other measure of financial performance presented in accordance with U.S. GAAP, nor should Adjusted EBITDA be considered an alternative to operating surplus, adjusted operating surplus or other definitions in the Partnership’s partnership agreement.  Adjusted EBITDA has important limitations as an analytical tool because it excludes some, but not all, of the items that affects net (loss) income.  Additionally, because Adjusted EBITDA may be defined differently by other companies in the industry, and the Partnerships definition of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, the utility of such a measure is diminished.  For a reconciliation of Adjusted EBITDA to net loss, please see the table below.

 

This press release references forward-looking estimates of Adjusted EBITDA projected to be generated by the Partnership during the year ending December 31, 2018. A reconciliation of estimated 2018 Adjusted EBITDA to U.S. GAAP net income (loss) is not provided because U.S. GAAP net income (loss) for the projection period is not practical to assess due to unknown variables and uncertainty related to future results. In recent years, the Partnership has recognized significant asset impairment charges, transition and reorganization costs, losses on early extinguishment of debt, and debt restructuring costs.  While these items affect U.S. GAAP net income (loss), they are generally excluded from Adjusted EBITDA. Therefore, these items do not materially impact the Partnership’s ability to forecast Adjusted EBITDA.

 

About Foresight Energy LP

 

Foresight is a leading producer and marketer of thermal coal controlling over 1.7 billion tons of coal reserves in the Illinois Basin. Foresight currently operates two longwall mining complexes with three longwall mining systems (Williamson (one longwall mining system) and Sugar Camp (two longwall mining systems)), one continuous mining operation (Macoupin) and the Sitran river terminal on the Ohio River. Foresight’s operations are strategically located near multiple rail and river transportation access points, providing transportation cost certainty and flexibility to direct shipments to the domestic and international markets.  Foresight also owns coal interests and mining assets located in southeastern Ohio.

 

 

Contact

 

Cody E. Nett

Corporate Secretary and Director of Media and Investor Relations

740-338-3100

Investor.relations@foresight.com

Media@coalsource.com

 

 

 

 

1 

Foresight adopted pushdown accounting as of March 31, 2017 as a result of Murray Energy obtaining control of its general partner.  As required by pushdown accounting, the Partnership revalued its balance sheet on the change of control date and therefore certain financial statement line items are not comparable to prior periods.  As such, operational results prior to March 31, 2017 were recorded on the predecessor financial statements (the “Predecessor”).  Operational results subsequent to March 31, 2017 were recorded on the successor financial statements (the “Successor”).     

 

3

 

 


 

 

Foresight Energy LP

Unaudited Condensed Consolidated Balance Sheets

(In Thousands)

 

(Successor)

 

 

 

(Successor)

 

 

June 30,

 

 

 

December 31,

 

 

2018

 

 

 

2017

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

38,760

 

 

 

$

2,179

 

Accounts receivable

 

27,242

 

 

 

 

35,158

 

Due from affiliates

 

49,908

 

 

 

 

37,685

 

Financing receivables - affiliate

 

3,262

 

 

 

 

3,138

 

Inventories, net

 

44,678

 

 

 

 

40,539

 

Prepaid royalties

 

 

 

 

 

4,000

 

Deferred longwall costs

 

20,427

 

 

 

 

9,520

 

Other prepaid expenses and current assets

 

7,243

 

 

 

 

10,844

 

Contract-based intangibles

 

1,867

 

 

 

 

11,268

 

Total current assets

 

193,387

 

 

 

 

154,331

 

Property, plant, equipment and development, net

 

2,203,885

 

 

 

 

2,378,605

 

Due from affiliates

 

 

 

 

 

947

 

Financing receivables - affiliate

 

62,434

 

 

 

 

64,097

 

Prepaid royalties, net

 

2,096

 

 

 

 

1,250

 

Other assets

 

4,087

 

 

 

 

5,358

 

Contract-based intangibles

 

1,389

 

 

 

 

2,052

 

Total assets

$

2,467,278

 

 

 

$

2,606,640

 

Liabilities and partners’ capital

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current portion of long-term debt and capital lease obligations

$

50,449

 

 

 

$

109,532

 

Current portion of sale-leaseback financing arrangements

 

4,907

 

 

 

 

4,148

 

Accrued interest

 

24,258

 

 

 

 

13,410

 

Accounts payable

 

88,081

 

 

 

 

76,658

 

Accrued expenses and other current liabilities

 

65,575

 

 

 

 

62,442

 

Asset retirement obligations

 

4,416

 

 

 

 

4,416

 

Due to affiliates

 

24,909

 

 

 

 

13,324

 

Contract-based intangibles

 

20,275

 

 

 

 

28,688

 

Total current liabilities

 

282,870

 

 

 

 

312,618

 

Long-term debt and capital lease obligations

 

1,221,776

 

 

 

 

1,205,000

 

Sale-leaseback financing arrangements

 

194,118

 

 

 

 

196,496

 

Asset retirement obligations

 

51,583

 

 

 

 

39,655

 

Other long-term liabilities

 

29,383

 

 

 

 

32,330

 

Contract-based intangibles

 

71,220

 

 

 

 

144,715

 

Total liabilities

 

1,850,950

 

 

 

 

1,930,814

 

Limited partners' capital:

 

 

 

 

 

 

 

 

Common unitholders (79,921 and 77,644 units outstanding as of June 30, 2018 and December 31, 2017, respectively)

 

388,575

 

 

 

 

421,161

 

Subordinated unitholder (64,955 units outstanding as of June 30, 2018 and December 31, 2017)

 

227,753

 

 

 

 

254,665

 

Total partners' capital

 

616,328

 

 

 

 

675,826

 

Total liabilities and partners' capital

$

2,467,278

 

 

 

$

2,606,640

 

 


 

4

 

 


 

 

Foresight Energy LP

Unaudited Condensed Consolidated Statements of Operations

(In Thousands, Except Per Unit Data)

 

(Successor)

 

 

(Successor)

 

 

 

(Successor)

 

 

(Successor)

 

 

(Predecessor)

 

 

Three Months Ended

June 30, 2018

 

 

Three Months Ended

June 30, 2017

 

 

 

Six Months Ended

June 30, 2018

 

 

Period From

April 1, 2017 through

June 30, 2017

 

 

Period From

January 1, 2017

through

March 31, 2017

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coal sales

$

269,992

 

 

$

204,516

 

 

 

$

508,379

 

 

$

204,516

 

 

$

227,813

 

Other revenues

 

1,430

 

 

 

2,577

 

 

 

 

3,769

 

 

 

2,577

 

 

 

2,581

 

Total revenues

 

271,422

 

 

 

207,093

 

 

 

 

512,148

 

 

 

207,093

 

 

 

230,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of coal produced (excluding depreciation, depletion and amortization)

 

136,982

 

 

 

105,790

 

 

 

 

257,552

 

 

 

105,790

 

 

 

117,762

 

Cost of coal purchased

 

3,906

 

 

 

 

 

 

 

5,657

 

 

 

 

 

 

7,973

 

Transportation

 

59,034

 

 

 

28,258

 

 

 

 

105,477

 

 

 

28,258

 

 

 

37,726

 

Depreciation, depletion and amortization

 

55,312

 

 

 

49,537

 

 

 

 

106,732

 

 

 

49,537

 

 

 

39,298

 

Contract amortization and write-off

 

(70,424

)

 

 

8,733

 

 

 

 

(71,844

)

 

 

8,733

 

 

 

 

Accretion on asset retirement obligations

 

559

 

 

 

728

 

 

 

 

1,290

 

 

 

728

 

 

 

710

 

Selling, general and administrative

 

10,534

 

 

 

7,277

 

 

 

 

18,309

 

 

 

7,277

 

 

 

6,554

 

Long-lived asset impairments

 

110,689

 

 

 

 

 

 

 

110,689

 

 

 

 

 

 

 

Loss on commodity derivative contracts

 

 

 

 

1,117

 

 

 

 

 

 

 

1,117

 

 

 

1,492

 

Other operating (income) expense, net

 

(42,983

)

 

 

(13,490

)

 

 

 

(43,631

)

 

 

(13,490

)

 

 

451

 

Operating income

 

7,813

 

 

 

19,143

 

 

 

 

21,917

 

 

 

19,143

 

 

 

18,428

 

Other expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

37,035

 

 

 

35,420

 

 

 

 

72,708

 

 

 

35,420

 

 

 

43,380

 

Change in fair value of warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,278

)

Loss on early extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

95,510

 

Net loss

$

(29,222

)

 

$

(16,277

)

 

 

$

(50,791

)

 

$

(16,277

)

 

$

(111,184

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss available to limited partner units - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common unitholders

$

(14,090

)

 

$

(8,790

)

 

 

$

(23,879

)

 

$

(8,790

)

 

$

(56,259

)

Subordinated unitholder

$

(15,132

)

 

$

(7,487

)

 

 

$

(26,912

)

 

$

(7,487

)

 

$

(54,925

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per limited partner unit - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common unitholders

$

(0.18

)

 

$

(0.12

)

 

 

$

(0.30

)

 

$

(0.12

)

 

$

(0.85

)

Subordinated unitholder

$

(0.23

)

 

$

(0.12

)

 

 

$

(0.41

)

 

$

(0.12

)

 

$

(0.85

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average limited partner units outstanding - basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common units

 

79,842

 

 

 

76,270

 

 

 

 

79,347

 

 

 

76,270

 

 

 

66,533

 

Subordinated units

 

64,955

 

 

 

64,955

 

 

 

 

64,955

 

 

 

64,955

 

 

 

64,955

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions declared per limited partner unit

$

0.0565

 

 

$

 

 

 

$

0.1130

 

 

$

 

 

$

 

 


 

5

 

 


 

 

Foresight Energy LP

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

 

(Successor)

 

 

(Successor)

 

 

(Predecessor)

 

 

Six Months Ended

June 30, 2018

 

 

Period From

April 1, 2017

through

June 30, 2017

 

 

Period From

January 1, 2017

through

March 31, 2017

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(50,791

)

 

$

(16,277

)

 

$

(111,184

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

106,732

 

 

 

49,537

 

 

 

39,298

 

Amortization of debt discount and deferred issuance costs

 

1,326

 

 

 

628

 

 

 

6,365

 

Contract amortization and write-off

 

(71,844

)

 

 

8,733

 

 

 

 

Equity-based compensation

 

352

 

 

 

211

 

 

 

318

 

Loss on commodity derivative contracts

 

 

 

 

1,117

 

 

 

1,492

 

Settlements of commodity derivative contracts

 

 

 

 

444

 

 

 

3,724

 

Realized gains on coal derivatives included in investing activities

 

 

 

 

 

 

 

(3,520

)

Long-lived asset impairments

 

110,689

 

 

 

 

 

 

 

Insurance proceeds included in investing activities

 

(42,947

)

 

 

 

 

 

 

Change in fair value of warrants

 

 

 

 

 

 

 

(9,278

)

Debt extinguishment expense

 

 

 

 

 

 

 

95,510

 

Other

 

 

 

 

5,867

 

 

 

1,321

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

7,916

 

 

 

1,836

 

 

 

19,695

 

Due from/to affiliates, net

 

309

 

 

 

(4,204

)

 

 

(13,157

)

Inventories

 

(3,327

)

 

 

(19,863

)

 

 

(917

)

Prepaid expenses and other assets

 

(5,050

)

 

 

(2,224

)

 

 

(5,117

)

Prepaid royalties

 

3,154

 

 

 

4,276

 

 

 

(241

)

Commodity derivative assets and liabilities

 

 

 

 

(303

)

 

 

(532

)

Accounts payable

 

11,423

 

 

 

4,075

 

 

 

7,324

 

Accrued interest

 

10,848

 

 

 

11,801

 

 

 

(9,803

)

Accrued expenses and other current liabilities

 

2,007

 

 

 

423

 

 

 

(3,430

)

Other

 

1,491

 

 

 

(965

)

 

 

1,782

 

Net cash provided by operating activities

 

82,288

 

 

 

45,112

 

 

 

19,650

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

Investment in property, plant, equipment and development

 

(32,228

)

 

 

(21,732

)

 

 

(19,908

)

Return of investment on financing arrangements with Murray Energy (affiliate)

 

1,539

 

 

 

719

 

 

 

705

 

Insurance proceeds

 

42,947

 

 

 

 

 

 

 

Settlement of certain coal derivatives

 

 

 

 

 

 

 

3,520

 

Proceeds from sale of property, plant and equipment

 

 

 

 

 

 

 

1,898

 

Net cash provided by (used in) investing activities

 

12,258

 

 

 

(21,013

)

 

 

(13,785

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

Borrowings under revolving credit facility

 

50,000

 

 

 

 

 

 

 

Payments on revolving credit facility

 

(15,000

)

 

 

 

 

 

(352,500

)

Net change in borrowings under A/R securitization program

 

 

 

 

(100

)

 

 

7,000

 

Proceeds from long-term debt and capital lease obligations

 

 

 

 

 

 

 

1,234,438

 

Payments on long-term debt and capital lease obligations

 

(78,633

)

 

 

(12,287

)

 

 

(970,721

)

Payments on short-term debt

 

(3,654

)

 

 

 

 

 

 

Proceeds from issuance of common units to Murray Energy (affiliate)

 

 

 

 

 

 

 

60,586

 

Distributions paid

 

(9,020

)

 

 

 

 

 

 

Debt extinguishment costs

 

 

 

 

 

 

 

(57,645

)

Debt issuance costs paid

 

 

 

 

 

 

 

(27,328

)

Other

 

(1,658

)

 

 

(2,130

)

 

 

(1,892

)

Net cash used in financing activities

 

(57,965

)

 

 

(14,517

)

 

 

(108,062

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

36,581

 

 

 

9,582

 

 

 

(102,197

)

Cash, cash equivalents, and restricted cash, beginning of period

 

2,179

 

 

 

14,724

 

 

 

116,921

 

Cash, cash equivalents, and restricted cash, end of period

$

38,760

 

 

$

24,306

 

 

$

14,724

 


 

6

 

 


 

 

Reconciliation of U.S. GAAP Net Loss to Adjusted EBITDA (In Thousands)

 

(Successor)

Three Months Ended

June 30, 2018

 

 

(Successor)

Three Months Ended

June 30, 2017

 

 

(Successor)

Six Months Ended

June 30, 2018

 

 

(Successor)

Period From

April 1, 2017

through

June 30, 2017

 

 

(Predecessor)

Period From

January 1, 2017

through

March 31, 2017

 

 

Combined - Period From

January 1, 2017

through

June 30, 2017

 

Net loss(1)

$

(29,222

)

 

$

(16,277

)

 

$

(50,791

)

 

$

(16,277

)

 

$

(111,184

)

 

$

(127,461

)

Interest expense, net

 

37,035

 

 

 

35,420

 

 

 

72,708

 

 

 

35,420

 

 

 

43,380

 

 

 

78,800

 

Depreciation, depletion and amortization

 

55,312

 

 

 

49,537

 

 

 

106,732

 

 

 

49,537

 

 

 

39,298

 

 

 

88,835

 

Accretion on asset retirement obligations

 

559

 

 

 

728

 

 

 

1,290

 

 

 

728

 

 

 

710

 

 

 

1,438

 

Contract amortization and write-off

 

(70,424

)

 

 

8,733

 

 

 

(71,844

)

 

 

8,733

 

 

 

 

 

 

8,733

 

Noncash impact of recording coal inventory to fair value in pushdown accounting

 

 

 

 

 

4,562

 

 

 

 

 

 

4,562

 

 

 

 

 

 

4,562

 

Equity-based compensation

 

175

 

 

 

211

 

 

 

352

 

 

 

211

 

 

 

318

 

 

 

529

 

Long-lived asset impairments

 

110,689

 

 

 

 

 

 

110,689

 

 

 

 

 

 

 

 

 

 

Loss on commodity derivative contracts

 

 

 

 

1,117

 

 

 

 

 

 

1,117

 

 

 

1,492

 

 

 

2,609

 

Settlements of commodity derivative contracts

 

 

 

 

444

 

 

 

 

 

 

444

 

 

 

3,724

 

 

 

4,168

 

Change in fair value of warrants

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,278

)

 

 

(9,278

)

Loss on early extinguishment of debt

 

 

 

 

 

 

 

 

 

 

 

 

 

95,510

 

 

 

95,510

 

Adjusted EBITDA

$

104,124

 

 

$

84,475

 

 

$

169,136

 

 

$

84,475

 

 

$

63,970

 

 

$

148,445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) - Included in net loss during the three and six months ended June 30, 2018 and the three months and combined period ended June 30, 2017 was insurance proceeds of $44.1 million and $12.8 million, respectively, from the Hillsboro mine combustion event.

 

 

Operating Metrics (In Thousands, Except Per Ton Data)

 

(Successor)

Three Months Ended

June 30, 2018

 

 

(Successor)

Three Months Ended

June 30, 2017

 

 

(Successor)

Six Months Ended

June 30, 2018

 

 

(Successor)

Period From

April 1, 2017

through

June 30, 2017

 

 

(Predecessor)

Period From

January 1, 2017

through

March 31, 2017

 

 

Combined - Period From

January 1, 2017

through

June 30, 2017

 

 

Produced tons sold

 

5,779

 

 

 

4,835

 

 

 

10,978

 

 

 

4,835

 

 

 

5,165

 

 

 

10,000

 

 

Purchased tons sold

 

88

 

 

 

 

 

 

129

 

 

 

 

 

 

118

 

 

 

118

 

 

Total tons sold

 

5,867

 

 

 

4,835

 

 

 

11,107

 

 

 

4,835

 

 

 

5,283

 

 

 

10,118